Following an unwritten agreement between America and the European Countries and acquiescence by other member countries of the World Bank at the time of its establishment, the post of president of the Bank has been filled up by a candidate nominated by America. The justification implicit in this procedure is the fact of America holding the majority shares of the Bank. But the monopoly of America in heading this pre-eminent multilateral financial institution has been challenged recently by member countries in Asia, Africa and Latin America. When the incumbent President was nominated by President Obama, he faced stiff competition from a Latin American and an African candidate. In the murky world of international politics the American candidate prevailed at the end.
The surprise early departure of the present World Bank President Jim Yong Kim after February one, not even half way through his second five-year term, has allowed President Trump to weigh in on his successor. After reshaping the US presidency from its traditional mould, jolting close allies of long standing, upsetting the apple cart of international trade and sending a judge of his ideological choice to the Supreme Court Donald Trump has now a chance to place a man of his convictions and shared worldview to the top position of World Bank. The smirk in his face is only palpable and broad, it can be well imagined. The unexpected early vacancy gives the megalomaniac American president opportunity to assert the supremacy of his country over the affairs of the most revered global multilateral institution. In the process, he expects to secure America's interests over those of other member countries through the president of World Bank who would be only too compliant to do his bidding because of ideological affinity and gratitude. By now Trump has firmly entrenched his credentials and panache for wrecking multilateral institutions suspected by him of undermining American national interests and allegedly circumscribing America's sovereignty. World Bank as the pre-eminent multilateral financial institution providing loans and technical know-how to borrowing countries must have been in the crosshair of President Trump. It can be well imagined that he has salivated ever since occupying the White House to control the Bank management and its policies as part of his strategy to reset the extant international economic order. Presented with the opportunity much before expected, he is not going to make any mistake about bringing the Bank under the stranglehold of America through a president of the Bank who shares his ideological proclivities.
President Trump reportedly considered the former Nigerian finance Minister who was nominated by African countries to compete against Kim in 2012 and former PepsiCo chief Indra Nooyi, a favourite of his daughter Ivanka. It would have been very astute of Trump if he were to nominate either of these two candidates. In the event, he selected David Malpass, currently under secretary general of US Treasury and a foreign policy hawk. The nomination immediately raised eyebrows both inside the Bank and among leaders of member countries. This is because Malpass is no dark horse and his past records and present stance on financial matters are in the public domain. His scathing criticisms of World Bank and the International Monetary Fund (IMF) as being inefficient and corrupt still reverberate along the corridors of these two organisations much to the dislike, even disgust of their employees. Though criticisms against the two organisations are not new, no one has decried their activities with such passion and bitterness as Malpass. It is not surprising that even the regular critics of the Bretton Woods sisters find Malpass as too extreme and intolerant. He is seen by most of them as an undiluted critic in the mould of the Florentine Savaranola, intent on destroying rather than reforming.
The consensus view in and outside World Bank is that the organisation needs reform but it should be spearheaded by a rational and pragmatic reformer. Malpass does not pass muster according to this crucible. His views on China are too well-known and makes him a divisive force rather than a unifier. As a Treasury official, Malpass has sought to unwind every aspect of World Bank's relationship with China. Speaking at the Council of Foreign Relations in 2017 he pointed out that China was the biggest borrower of the Bank even though it has plenty of its own resources in addition to having access to capital markets. In a written testimony to a Senate Foreign Relations sub-committee in November last year he said, 'we are working with allies to guide multilateral development banks (MDBs) away from what would be viewed as endorsement of China's geopolitical ambitions'. These public utterances have left no doubt that he is more of a political and ideological figure than a development administrator.
The thought that Malpass will act as the instrument to implement the anti-China policy of President Trump once installed as the chief of the bank, has become inevitable and widespread. In other words, he will be the Manchurian candidate of Trump to do his bidding once installed as the chief of World Bank. This makes him biased and controversial, to say the least, and as such is considered ill-equipped to head a multilateral development institution designed to promote economic growth across the world. The fact that he was the chief economist at Bears Sterns when it went down during the financial crisis in 2007 has not worked in his favour either. His anti-China bias coupled with inept and lacklustre performance at the investment bank where he worked for over a decade makes him a weak candidate to head a multilateral institution.
At a time when the role of World Bank has been undergoing thorough close scrutiny, particularly its dominance by America, the nomination of Malpass is not only inopportune but at the same time potentially disastrous of the prospect for effective reform. Realising this catastrophe looming in the horizon even the close allies of America may oppose the nomination and if no American candidate with solid credential and merit is nominated, alternative candidates may appear enjoying the support of many member countries.
But in the rough and tumble world of global politics, President Trump may have his way in the end. What his Manchurian candidate will do as the president of World Bank can only be imagined. Even the circumspect Board of Directors may not be able to rein him in. It is true that the president of the bank does not have veto power but he can delay matters and stall decisions creating a stalemate. For an organisation where time is of the essence this can be disastrous. If the Manchurian candidate is expected to create this logjam as the strategy to weaken or hemorrhage the Bank, he can be expected to deliver.
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